Companies would take tax hike hit

Saturday

Apr 6, 2013 at 7:31 PM

Businesses will bear most of the burden if the school-tax hike on the May 4 ballot passes.The Terrebonne School Board is asking voters to approve a 31-mill property tax increase, or four times more than the current 9.27 mill tax.

Xerxes WilsonStaff Writer

Businesses will bear most of the burden if the school-tax hike on the May 4 ballot passes.The Terrebonne School Board is asking voters to approve a 31-mill property tax increase, or four times the current 9.27 mill tax.Superintendent Philip Martin has said the system will use the money for employee raises and building improvements, but critics, which now include the Houma-Terrebonne Chamber of Commerce, have complained the plan is vague and lacks sufficient public input.Commercial property is assessed at a higher rate than residential property and the first $75,000 of a home's assessed value is exempt from property tax. Those two factors combined mean that businesses will pay 70 to 80 percent of the $25 million the increase would generate annually, according to data provided by Terrebonne Tax Assessor Loney Grabert. About 40 percent of homeowners in Terrebonne are exempt from paying any property tax at all because of the state's homestead exemption, Grabert said.

The parish's top 20 taxpayers, mostly oilfield-service related ones, would contribute about $6.7 million of the $25 million the increase would bring in, or more than a fourth of the money, according to data provided by Grabert.Terrebonne's top taxpayer in 2012 was Hilcorp Energy, a Houston-based energy exploration and production company. The company's 2012 tax bill was $3.9 million. If the school tax passes, Hilcorp will pay $1.2 million more this year, according to statistics provided by Grabert.Hilcorp officials did not return Courier phone calls.While multi-million dollar companies will take the biggest hits, Gordon Crow, president of the Houma-Terrebonne Chamber of Commerce, said it's the small-to-medium sized business that he is concerned about. The chamber has urged voters to reject the tax because of a perceived lack of specificity in how the money will be spent. Glen Usie, owner of the Woodlawn Ranch Road-based machine shop Glenco, said the hike would hurt his bottom line.“We either have to scale back some services or pass (the cost) along to the customer somewhere down the line,” he said, adding his customers will be “taxed on their end, too.”Usie's shop employs 14 and already pays about $5,000 in property taxes annually.He said it makes more sense to raise taxes a little at a time instead of all at once so businesses can more easily factor the increase into their operating budgets.The tax could present difficulties for companies competing outside the local market, according to Drew Boquet, president of Flow-Line Valve and Controls, a manufacturer based in Shriever. “With the global marketplace, with companies everywhere, you can't pass (the cost) along to your customers,” Boquet said.“I have competitors out of Houston and North Carolina and other places that are getting tax breaks,” said Bouquet, whose business ships about 90 percent of its product out of Louisiana.The tax, like any increase, could affect the parish's ability to lure new businesses, Crow said.

The average Terrebonne taxpayer currently pays about 98 mills a year in taxes. Should the school tax increase pass, the new total would be about 129. A mill is about $1 on each $1,000 in assessed property value.A taxpayer with a home valued around $150,000 will see a $232 increase in the tax annually paid for schools. The same homeowner currently pays about $70 toward the schools.The average taxpayer in Lafourche currently pays between 110 and 120 mills in total, and St. Mary Parish taxpayers pay about 100 mills, according to assessors in those jurisdictions.

But not all business owners subscribe to Crow's position that the hike would impact competitiveness.“When a business looks to locate in an area, they look at the education system and what shape it is in,” said Merlin Lirette, owner of Merlin Group, an architecture and construction firm in Houma. “If we can improve the schools, it will help bring in business.” Crow agrees that the education system is one of the first things a business considers when looking to move somewhere. He also agrees that the schools need more money, but he, along with Usie and Boquet, took aim at a perceived lack of specificity in how the money will be spent and how it will improve educational outcomes. Kenny Smith, CEO of the engineering and consulting firm T. Baker Smith, said it's a “no-brainer” to invest in eduction, “but it can't be done randomly, it has to be done more precisely.”“The community deserves a plan,” he said. “How are we going to improve our education system? How are we going to get excellence for our schools,” he asked.The School Board has a two-page document on its website, www.tpsd.org, outlining the initiatives it will undertake if the proposal is approved by voters. In some cases, the document does not outline specifics for an initiative and costs for construction projects are not provided.Cost estimates have been done for each project outlined by the document and can be provided, Martin has said.Smith said that plan doesn't go far enough, calling it "14 points on a two-page document.”T. Baker Smith paid about $100,000 in property tax on buildings and equipment last year. If the tax passes, the firm is looking at a 40 percent increase, he said.

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